Stock Analysis

Insiders of NextPlat Corp (NASDAQ:NXPL) are up 2.3% on their US$3.8m purchase after NextPlat Corp (NASDAQ:NXPL) rose 22% last week

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NasdaqCM:NXPL
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Insiders who bought NextPlat Corp (NASDAQ:NXPL) stock in the last 12 months were richly rewarded last week. The company's market value increased by US$3.1m as a result of the stock's 22% gain over the same period. As a result, their original purchase of US$3.8m worth of stock is now worth US$3.9m.

While we would never suggest that investors should base their decisions solely on what the directors of a company have been doing, logic dictates you should pay some attention to whether insiders are buying or selling shares.

Check out our latest analysis for NextPlat

NextPlat Insider Transactions Over The Last Year

Over the last year, we can see that the biggest insider purchase was by Independent Director Rodney Barreto for US$1.9m worth of shares, at about US$1.75 per share. That implies that an insider found the current price of US$1.79 per share to be enticing. That means they have been optimistic about the company in the past, though they may have changed their mind. We do always like to see insider buying, but it is worth noting if those purchases were made at well below today's share price, as the discount to value may have narrowed with the rising price. The good news for NextPlat share holders is that insiders were buying at near the current price.

NextPlat insiders may have bought shares in the last year, but they didn't sell any. You can see a visual depiction of insider transactions (by companies and individuals) over the last 12 months, below. If you click on the chart, you can see all the individual transactions, including the share price, individual, and the date!

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NasdaqCM:NXPL Insider Trading Volume March 14th 2023

NextPlat is not the only stock insiders are buying. So take a peek at this free list of growing companies with insider buying.

Insider Ownership

I like to look at how many shares insiders own in a company, to help inform my view of how aligned they are with insiders. Usually, the higher the insider ownership, the more likely it is that insiders will be incentivised to build the company for the long term. NextPlat insiders own about US$13m worth of shares (which is 73% of the company). I like to see this level of insider ownership, because it increases the chances that management are thinking about the best interests of shareholders.

So What Do The NextPlat Insider Transactions Indicate?

The fact that there have been no NextPlat insider transactions recently certainly doesn't bother us. However, our analysis of transactions over the last year is heartening. Judging from their transactions, and high insider ownership, NextPlat insiders feel good about the company's future. So these insider transactions can help us build a thesis about the stock, but it's also worthwhile knowing the risks facing this company. When we did our research, we found 4 warning signs for NextPlat (2 are a bit unpleasant!) that we believe deserve your full attention.

Of course NextPlat may not be the best stock to buy. So you may wish to see this free collection of high quality companies.

For the purposes of this article, insiders are those individuals who report their transactions to the relevant regulatory body. We currently account for open market transactions and private dispositions, but not derivative transactions.

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